NO.PZ2023090502000005
问题如下：
In which of the following situations does the double taxation of the corporate organizational form matter the least?
选项：
A.The company expects to pay all its after-tax income as a dividend to shareholders each year
B.The company’s shareholders reside in a tax jurisdiction with a high tax rate on dividend income.
C.The company is expecting to reinvest all its after-tax profits each year into growth of the business.
解释：
C is correct. Reinvestment of all profits implies that the company pays no dividend to shareholders, and thus, no double taxation occurs.
A is incorrect. Double taxation occurs because dividend income is taxed at both the corporate level and the shareholders’ personal levels. If all after-tax profits are distributed, shareholders are taxed twice on the business’s income.
B is incorrect because a high tax rate on shareholders’ dividend income received would be a strong impetus to retain profits, find alternative means of distributing profits, or change the organizational form.
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